The Department of Trade and Industry (DTI) said it would defer to the Bureau of Internal Revenue (BIR) on the tax treatment of the special discounts on basic necessities and prime commodities enjoyed by senior citizens and persons with disability (PWD), according to Assistant Secretary Amanda Nograles.
Nograles said in a press briefing the agency referred the concerns of retailers on how these discounts apply on their tax especially as there are plans to increase the discounts to P125 per week from P65 per week capped at a total purchase value of P1,500.
She said BIR can come out with a revenue regulation or, together with the DTI, a joint memorandum circular on the matter.
She added there were also discussions in Congress on whether or not there is a need to amend Republic Act 99944 or the Expanded Senior Citizens Act of 2010.
“We wrote BIR officially referring the issue of tax treatment ,” Nograles said.
Sales covered by special discounts for PWDs are allowed as a deduction for income tax purposes. But the law is silent on discounts to seniors.
Steve Cua, president of the Philippine Amalgamated Supermarkets Association, said the group is not opposed to the increase in discounts to seniors as long as the sales are tax deductible.
“They can go unli(mited) and even do away with booklets as long as these sales discounts are tax deductible,” Cua said.
Cua said there should be some safeguards in implementation otherwise retailers would simply increase their prices.
The DTI, the Department of Agriculture and the Department of Energy are poised to issue a joint administrative order (JAO) revising the rules on the grant of social discounts to senior citizens and PWDs on purchase of BNPCs.
RA 99944 provides a special discount to seniors or PWD a special discount of five percent of the regular retail price of BNPCs without exemption from the value-added tax.
Under the proposed JAO, the total amount of special discount on their BNPC purchase shall not exceed P125 per week, without carryover of the unused amount.